WEBVTT - Lots More on America's Electrical Components Crisis 0:00:03.120 --> 0:00:07.480 Bloomberg Audio Studios, podcasts, radio news. 0:00:10.280 --> 0:00:10.640 What's up? 0:00:10.720 --> 0:00:11.600 Chris's Joe? 0:00:11.840 --> 0:00:13.480 Hi? How are you today? Hey Chris? 0:00:13.520 --> 0:00:14.640 How's it going? By? 0:00:14.720 --> 0:00:15.720 Tracy? How are you today? 0:00:15.800 --> 0:00:18.360 I'm good? Thank you. I'm sorry we kept you waiting. 0:00:18.760 --> 0:00:21.599 I saw your tweet, No problem whatsoever. 0:00:21.640 --> 0:00:22.919 I was just giving you guys a hard time. 0:00:22.960 --> 0:00:28.000 So Tracy, we're back with our favorite Dutch bros. Brow 0:00:29.760 --> 0:00:32.199 the brow of the Brow of Dutch Bros. 0:00:34.920 --> 0:00:39.440 I did a deadlift one two, Jimmy, Okay, what's. 0:00:41.159 --> 0:00:41.319 Uh? 0:00:41.479 --> 0:00:41.959 Marges? 0:00:42.120 --> 0:00:44.199 This isn't After School Special, except. 0:00:43.880 --> 0:00:46.440 I've decided I'm going to base my entire personality going 0:00:46.440 --> 0:00:49.680 forward on campaigning for a strategic pork reserve in the US. 0:00:49.760 --> 0:00:51.520 Where's the best with imposta? 0:00:51.680 --> 0:00:54.240 These are the important question? Is it robots taking over 0:00:54.280 --> 0:00:54.640 the world? 0:00:54.720 --> 0:00:54.880 No? 0:00:54.920 --> 0:00:57.840 I think that like in a couple of years, the 0:00:57.920 --> 0:01:00.120 AI will do a really good job of making the 0:01:00.120 --> 0:01:03.600 Odd Lots podcast and people Today, I don't really need 0:01:03.640 --> 0:01:05.280 to listen to Joe and Tracy anymore. 0:01:05.480 --> 0:01:06.400 We do have. 0:01:07.800 --> 0:01:11.679 The perfect welcome to lots More where we catch up 0:01:11.680 --> 0:01:13.199 with friends about what's going on. 0:01:13.360 --> 0:01:16.520 Right now, because even when Odd Lots is over, there's 0:01:16.640 --> 0:01:17.880 always lots More. 0:01:18.319 --> 0:01:24.440 And we really do have the perfect guest, Chris Hatch. 0:01:24.480 --> 0:01:27.600 We talked to him several weeks ago about opening up 0:01:27.680 --> 0:01:30.440 drive throughs. But Chris, what are you up to these days? 0:01:30.840 --> 0:01:34.360 Yeah, just continue to try and build buildings and figure 0:01:34.400 --> 0:01:36.240 out how to get some of the stuff out of 0:01:36.240 --> 0:01:40.160 the ground and get these projects built and constructed. It 0:01:40.319 --> 0:01:42.920 seems like it just grows harder every day, more and 0:01:42.959 --> 0:01:43.720 more challenges. 0:01:44.040 --> 0:01:47.480 So yeah, So, Tracy, We've talked about like almost every 0:01:47.520 --> 0:01:50.680 supply chain crisis under the sun over the last three years. 0:01:51.080 --> 0:01:53.600 But there's one thing it's been in shortage for forty 0:01:53.640 --> 0:01:56.080 two straight months according to the ISM, and that is 0:01:56.120 --> 0:01:59.000 electrical transformers and parts. We've never talked about that. 0:01:59.480 --> 0:02:03.120 You finally get to do your Transformer episode. 0:02:02.680 --> 0:02:06.880 Chris, what's your Transformer in the electrical Sorry, I guess 0:02:06.920 --> 0:02:08.480 I have a six year old son and you talk 0:02:08.520 --> 0:02:09.520 about Optimus Prime. 0:02:09.680 --> 0:02:12.600 Yeah, yeah, or basically not. 0:02:12.720 --> 0:02:14.800 Stop at my household? 0:02:15.400 --> 0:02:16.160 Yeah, I know them. 0:02:16.440 --> 0:02:18.320 Well, what does it mean when you're trying to build 0:02:18.360 --> 0:02:21.160 a new Starbucks or Dutch Bros. Location off the side 0:02:21.160 --> 0:02:22.280 of a highway in Texas? 0:02:23.400 --> 0:02:26.280 Let's use Utah if that's okay, And mostly just because 0:02:26.320 --> 0:02:30.120 it's easier. There's less power companies in Utah. So starting 0:02:30.120 --> 0:02:33.280 with Rocky Mountain Power, who supplies the power for probably 0:02:33.320 --> 0:02:35.320 eighty percent of the state of Utah. There are a 0:02:35.320 --> 0:02:37.200 few cities that have the power company. There's a different 0:02:37.200 --> 0:02:40.120 power company Southern Utah. You have kind of the main grid, 0:02:40.320 --> 0:02:42.720 So think of that as like, you know, basically the 0:02:42.760 --> 0:02:46.640 main power supply that's going into a huge city. And 0:02:46.720 --> 0:02:49.120 so once you come off of the grid, the first 0:02:49.160 --> 0:02:52.080 place the electric comes to is a transformer that sits 0:02:52.120 --> 0:02:54.320 on your site. And the easiest way to think of 0:02:54.360 --> 0:02:56.760 it is this is kind of it's a green typically 0:02:57.040 --> 0:03:00.160 or blue or some kind of kind of darker landscape 0:03:00.200 --> 0:03:04.720 colored cabinet that sits in the landscaping area somewhere. It's 0:03:04.760 --> 0:03:07.840 usually two or three feet tall, maybe sometimes four or 0:03:07.880 --> 0:03:10.960 five feet tall, about three or four feet square, and 0:03:11.000 --> 0:03:13.400 that's where the power comes in from the power grid 0:03:13.760 --> 0:03:16.800 to your site. So that is transfer. Got it. 0:03:17.240 --> 0:03:20.799 So Joe finally gets his transformer episode. I think he's 0:03:20.840 --> 0:03:25.079 been tweeting like religiously every time the ISM survey comes 0:03:25.120 --> 0:03:28.679 out where they're talking about the shortage. But is it 0:03:28.760 --> 0:03:33.679 at all common for transformers to go through periods of 0:03:34.000 --> 0:03:37.240 scarcity or has what we've seen over the past couple 0:03:37.280 --> 0:03:38.960 of years now been unusual. 0:03:39.600 --> 0:03:43.600 Yeah, that's a great question. Definitely, during the kind of 0:03:44.160 --> 0:03:46.120 over the last four years, let's just call it kind 0:03:46.160 --> 0:03:49.400 of the post COVID world, we've definitely seen some real 0:03:49.440 --> 0:03:53.240 strains on the supply of transformers into the world. At 0:03:53.280 --> 0:03:55.200 the moment, with at least the type of buildings that 0:03:55.240 --> 0:03:59.080 I'm building, the transformers actually aren't the longest lead supply item, 0:03:59.400 --> 0:04:02.040 So that's the first step of where the power comes 0:04:02.080 --> 0:04:05.600 off of the line, and it's actually the switch gear 0:04:05.800 --> 0:04:08.680 that's the problem right now today is that there's these 0:04:08.720 --> 0:04:11.080 massive delays with switch gear that are going in the 0:04:11.160 --> 0:04:12.080 United States right now. 0:04:12.440 --> 0:04:13.240 What's switch gear? 0:04:14.200 --> 0:04:17.040 So power comes in from the grid to the transformer, 0:04:17.480 --> 0:04:20.320 from the transformer to the meter, which makes sense, that's 0:04:20.440 --> 0:04:22.840 that's what the power company comes and reads to determine 0:04:22.880 --> 0:04:25.880 how much power you use in a month, and then 0:04:25.880 --> 0:04:27.640 from the meter it goes to the switch gear. The 0:04:27.640 --> 0:04:29.880 switch gear is where the power comes to your building. 0:04:29.960 --> 0:04:33.039 So this is usually cabinatry that sits flush or on 0:04:33.080 --> 0:04:34.960 the back of the building or one of the sides 0:04:35.000 --> 0:04:38.040 of the building most of the time. And that is 0:04:39.520 --> 0:04:41.880 in the example that I've got of a building that 0:04:41.920 --> 0:04:45.960 we are done building the building in West Valley City, Utah. 0:04:46.400 --> 0:04:50.039 I need a sixteen hundred amp switch gear piece so 0:04:50.760 --> 0:04:54.960 that electrical supply is enough to power sixteen hundred amps 0:04:55.000 --> 0:04:58.200 going into the building. So from the switch gear, then 0:04:58.240 --> 0:05:01.160 the power gets distributed to the pan in each individual 0:05:01.200 --> 0:05:01.839 tenant space. 0:05:02.920 --> 0:05:06.919 Wait, so when we say there's a shortage of transformers 0:05:07.000 --> 0:05:10.040 or switch gears or whatever, what do we actually mean 0:05:10.080 --> 0:05:13.440 here is that you can't get them. So the problem 0:05:13.560 --> 0:05:17.119 is your lead times expand, or the problem is there 0:05:17.200 --> 0:05:21.080 are enough of them to satisfy demand, and so prices 0:05:21.360 --> 0:05:24.360 go up, maybe to a prohibitive point. 0:05:24.839 --> 0:05:29.320 Maybe To start with my specific example, I originally ordered 0:05:29.360 --> 0:05:32.680 my switch gear a year ago, April of twenty twenty three. 0:05:33.279 --> 0:05:35.520 I was told that there was a one year lead time, 0:05:35.640 --> 0:05:39.840 which felt like an exorbitantly long time. That's longer than 0:05:39.960 --> 0:05:42.320 you know, the lead times kind of we're building over 0:05:42.320 --> 0:05:44.159 the last three or four years. But that was the 0:05:44.240 --> 0:05:48.960 longest we had heard up to that point. So we 0:05:49.200 --> 0:05:52.159 set a schedule with my contractor to have the building 0:05:52.240 --> 0:05:55.440 more or less complete right in April of twenty twenty four, 0:05:55.839 --> 0:05:57.720 so that the switch gear would then arrive and we 0:05:57.760 --> 0:05:59.680 could power up the building and then the tenants could 0:05:59.680 --> 0:06:03.360 step in and do their individual build out. The problem 0:06:03.520 --> 0:06:06.359 is that four weeks ago, for the first time, the 0:06:06.440 --> 0:06:10.400 supply house called my electrician, who called my general contractor, 0:06:10.400 --> 0:06:12.520 who called me and said it might be up to 0:06:12.600 --> 0:06:13.360 one more year. 0:06:16.880 --> 0:06:18.960 What does that cost you? Yeah, because you have to 0:06:19.040 --> 0:06:19.640 finance this. 0:06:19.880 --> 0:06:23.080 So it's like, you, could you tell us what's being 0:06:23.160 --> 0:06:25.440 built here? Is it another Dutch Bros. Or a Starbucks 0:06:25.480 --> 0:06:25.839 or something. 0:06:26.920 --> 0:06:29.359 It's a great question. This is a four tenant building. 0:06:29.440 --> 0:06:33.520 It's all restaurants. Cafe Rio is a Mexican grill with 0:06:33.600 --> 0:06:36.520 a drive through, Marcos, Pizza, Chip which is a cookie company, 0:06:36.520 --> 0:06:37.279 and Jersey Mikes. 0:06:37.960 --> 0:06:41.840 So what happens when your general contractor or whoever it is, 0:06:42.040 --> 0:06:44.280 gets the call from the electrician like, okay, you got 0:06:44.279 --> 0:06:45.000 to wait another year. 0:06:47.120 --> 0:06:49.200 You don't just drive to home depot and buy one 0:06:49.200 --> 0:06:54.719 of these parts. They don't exist. So you really have 0:06:54.920 --> 0:06:57.640 not a lot of great options at that point. And 0:06:57.720 --> 0:07:01.359 so it's been interesting because most of the people that 0:07:01.400 --> 0:07:03.880 are sitting in my seat as the developer have no 0:07:04.000 --> 0:07:06.400 idea what to do. And I mean I have talked 0:07:06.480 --> 0:07:09.600 to probably two or three hundred developers over the last 0:07:09.640 --> 0:07:12.440 two months, you know, a month. As soon as this 0:07:12.600 --> 0:07:16.120 problem became real, I've just started calling every peer I 0:07:16.160 --> 0:07:18.160 know in the space anywhere trying to figure out how 0:07:18.200 --> 0:07:21.160 I can solve the problem. And I would tell you 0:07:21.200 --> 0:07:23.880 that at least half of the people I've talked to 0:07:24.000 --> 0:07:27.000 are building buildings with a very similar power requirement to mine, 0:07:27.560 --> 0:07:30.160 and they might they're not as far along in the 0:07:30.160 --> 0:07:32.800 process as I am, and they're you know, kind of 0:07:32.840 --> 0:07:35.000 content because they're like, well, we don't have that problem. 0:07:35.000 --> 0:07:36.880 Our switch gear is supposed to be here on this day. 0:07:37.640 --> 0:07:41.160 And as I've dove in further on, there is a 0:07:41.160 --> 0:07:43.760 big problem. It's not just me. It's not some micro 0:07:43.880 --> 0:07:47.000 issue for Chris Hatches building. This is a massive issue 0:07:47.040 --> 0:07:49.600 that's impacting the whole you know, all of North America. 0:07:49.680 --> 0:07:53.640 Really there should be more switch gear sympathy in general. 0:07:53.800 --> 0:07:57.880 But Okay, I get that this is incredibly frustrating for you, 0:07:58.040 --> 0:08:00.680 and you know, waiting a whole year for something and 0:08:00.680 --> 0:08:02.880 then being told that actually it's going to be another 0:08:02.960 --> 0:08:06.560 year is kind of crazy. But in terms of the 0:08:06.600 --> 0:08:11.520 actual financial impact, who does that fall on. Is it 0:08:11.680 --> 0:08:15.760 you as the developer, or is it like the retailer 0:08:15.920 --> 0:08:19.440 Dutch Brothers or whoever who might have preleased that space. 0:08:20.920 --> 0:08:23.400 Yeah, in this case, it is the developer that's going 0:08:23.440 --> 0:08:25.720 to take the brunt of that impact. So it's the 0:08:25.760 --> 0:08:29.280 developer being me and my investors that are in the building. 0:08:29.960 --> 0:08:32.160 The good news is we built in a few line 0:08:32.160 --> 0:08:35.920 items and contingency line items. You don't necessarily hope to 0:08:35.960 --> 0:08:39.680 burn through all the contingency line items. And it's hard 0:08:39.679 --> 0:08:41.560 for me to guess when the switch here is going 0:08:41.559 --> 0:08:43.320 to arrive or when I'll be able to source it 0:08:43.360 --> 0:08:46.080 through an alternate means. If I just look at the 0:08:46.160 --> 0:08:49.439 one year out and we sit with this building. My contractor, 0:08:49.480 --> 0:08:52.320 by the way, finished the entire building two fridays ago, 0:08:52.559 --> 0:08:54.760 so they're done with the site. There's nothing left for 0:08:54.840 --> 0:08:56.440 them to do on the building until the switch gear 0:08:56.480 --> 0:08:56.920 gets here. 0:08:57.440 --> 0:09:00.360 So there's this whole complete building that would others be 0:09:00.440 --> 0:09:03.080 totally ready for the Mexican restaurant and the pizza restaurant, 0:09:03.120 --> 0:09:06.720 et cetera to move into. And the one thing that's 0:09:06.760 --> 0:09:09.280 preventing it is this part that could still take another year. 0:09:10.640 --> 0:09:13.120 Yes, and I mean we're just we're not doing anything 0:09:13.160 --> 0:09:15.480 crazy here. We're trying to serve the world. You know, 0:09:15.640 --> 0:09:19.440 tacos and pizza and cookies and sandwiches, right, you know, 0:09:20.400 --> 0:09:23.840 And so if I just sit for one year, you know, 0:09:23.920 --> 0:09:25.480 first off, I'm going to have to go extend my 0:09:25.559 --> 0:09:28.400 loan with the bank for sure, because I don't think 0:09:28.400 --> 0:09:30.440 I have a full year of time. But if they 0:09:30.480 --> 0:09:32.319 allow me to continue on it more or less the 0:09:32.400 --> 0:09:35.960 same terms I'm at today, my dead interest carry just 0:09:36.040 --> 0:09:38.400 my just my interest expense for holding the building for 0:09:38.440 --> 0:09:40.760 a year or one hundred and fifty eight thousand dollars. 0:09:41.920 --> 0:09:45.280 Wait, I still don't understand, like why do we have 0:09:45.600 --> 0:09:49.040 the shortage again? Can you maybe expound on that a 0:09:49.120 --> 0:09:52.319 little bit more? Like what is the bottleneck here? Exactly? 0:09:52.480 --> 0:09:55.120 So okay, switch gears, sure, but like who is making 0:09:55.160 --> 0:09:55.560 these things? 0:09:55.600 --> 0:09:57.040 Yeah? 0:09:57.080 --> 0:10:00.160 Sure? So if you think of it in terms, if 0:10:00.200 --> 0:10:02.960 you start looking at it through first, how the contracting 0:10:03.000 --> 0:10:07.000 typically works. A developer contracts with a general contractor when 0:10:07.040 --> 0:10:09.160 he goes to decide to build a building, and the 0:10:09.160 --> 0:10:11.440 contractor is going to build that building for them. The 0:10:11.520 --> 0:10:15.199 contractor then signs up subcontractors, one of which is an electrician. 0:10:15.800 --> 0:10:19.920 The electrician then signs up through a supply house an 0:10:20.040 --> 0:10:22.200 order that's going to get filled. You know, and what 0:10:22.280 --> 0:10:26.760 they're filling is whatever the developers, you know, electrical engineer 0:10:26.880 --> 0:10:28.080 had specked for the building. 0:10:28.240 --> 0:10:28.400 Right. 0:10:28.440 --> 0:10:30.400 So in this case, it's this sixteen hundred and am 0:10:30.440 --> 0:10:32.840 switch gear and then you know, my five panels that 0:10:32.880 --> 0:10:36.200 I've ordered, and so he's ordering that through a supply 0:10:36.280 --> 0:10:38.680 Here she was ordering that through a supply house, and 0:10:38.720 --> 0:10:42.880 then occasionally a supply house orders through a larger regional 0:10:42.880 --> 0:10:45.960 supply house, and then the regional supply house then orders 0:10:45.960 --> 0:10:49.360 from the manufacturer. Right, So haldful steps, But that's kind 0:10:49.360 --> 0:10:50.720 of how the contracting works. 0:10:50.800 --> 0:10:53.880 That was literally just the description that was this, you 0:10:54.000 --> 0:10:55.600 just walked us through the supply chain. 0:10:55.640 --> 0:10:58.560 Okay, keep going, but that was fantastic, yeah, right. 0:10:58.640 --> 0:11:01.800 So the real of that exists here is that there's 0:11:01.840 --> 0:11:05.400 more or less five big manufacturers of all of this 0:11:05.520 --> 0:11:09.480 electrical gear. So whether you're talking about the panels, or 0:11:09.520 --> 0:11:12.440 the transformers, or the metering equipment or the switch gear, 0:11:12.520 --> 0:11:14.560 all of it, it's all coming more or less from 0:11:14.600 --> 0:11:19.640 five big manufacturers. Semens, Eaten, Color, Hammer, Square D and 0:11:19.679 --> 0:11:23.120 then GE sold off recently there unit a couple of 0:11:23.160 --> 0:11:25.400 years ago, and I can't remember the subsidiary that they've 0:11:25.440 --> 0:11:40.720 sold it to. But those five provide the electrical components. 0:11:42.040 --> 0:11:44.800 When your developer talks to the electrician, or the electrician 0:11:44.840 --> 0:11:47.000 talks to the supply house, or the supply house talks 0:11:47.000 --> 0:11:49.360 of the regional supply house, of the regional supply I 0:11:49.400 --> 0:11:51.880 was talking to the manufacturing Did they give you a reason? 0:11:51.920 --> 0:11:56.120 Do they say what's going on? Or do they explain why? Hey, 0:11:56.160 --> 0:11:57.959 we told you it was going to be April twenty 0:11:58.000 --> 0:11:59.959 twenty four, and now it's going to be April twenty two. 0:12:00.440 --> 0:12:01.840 Do they give you some sort of excuse? 0:12:02.080 --> 0:12:04.480 Or yeah? Can you can you call them up and complain? 0:12:04.600 --> 0:12:07.400 Can you be like an electricity Karen or something like 0:12:07.480 --> 0:12:08.400 what what do you do? 0:12:09.000 --> 0:12:11.880 Yeah, there's not much recourse. I mean, that's that's the downer. 0:12:12.320 --> 0:12:14.520 It's an interesting world. And I don't know why it 0:12:14.559 --> 0:12:16.840 is exactly. And and Joe, you and I were tweeting 0:12:16.880 --> 0:12:20.120 about this or dming about this before the show. But 0:12:20.920 --> 0:12:24.079 for whatever reason, anytime you deal in electrical electrical is 0:12:24.120 --> 0:12:27.360 hand in hand with man'splaining. It doesn't matter what you do, 0:12:27.679 --> 0:12:31.440 somebody's gonna man explain you how you're wrong. And so 0:12:31.559 --> 0:12:34.800 even this podcast episode will come out and hundreds of 0:12:34.800 --> 0:12:38.360 people will man explain, Dared say something or Tracy, Yeah. 0:12:38.240 --> 0:12:40.520 It just I'm sure man explain to me. 0:12:40.800 --> 0:12:41.080 I'm not. 0:12:41.360 --> 0:12:45.360 If a guy explains transformers to another guy doesn't count 0:12:45.360 --> 0:12:46.240 as man explaining. 0:12:46.600 --> 0:12:48.160 Then it's just explaining. 0:12:48.480 --> 0:12:49.680 Explaining in a gender. 0:12:50.080 --> 0:12:50.880 What did I tell you? 0:12:50.920 --> 0:12:51.240 What? 0:12:51.240 --> 0:12:53.720 What's the what's the how do they man explain it to? 0:12:54.559 --> 0:12:57.480 Well? That's the interesting thing. It's it's you know. I 0:12:57.520 --> 0:12:59.960 So I started calling through. I started with my electric 0:13:00.280 --> 0:13:03.360 Then I went to my supply house, and I quickly 0:13:03.400 --> 0:13:06.120 realized my supply house. We have two supply houses in 0:13:06.160 --> 0:13:08.760 the state of Utah, and they're both too small for 0:13:09.080 --> 0:13:11.480 the vast majority of their orders. They order through a 0:13:11.520 --> 0:13:14.439 regional supply house. They don't order direct from the manufacturers, 0:13:15.160 --> 0:13:17.800 and so that's not a very good position to be in. 0:13:18.160 --> 0:13:20.600 And so I started I going to Twitter, I went 0:13:20.640 --> 0:13:23.160 to LinkedIn, I went to colleagues. I started pushing this 0:13:23.240 --> 0:13:26.800 message out and since then, I have spoken to somewhere 0:13:26.800 --> 0:13:29.360 around one hundred people that have told me they have 0:13:29.400 --> 0:13:32.000 a guy or they have somebody that can source the 0:13:32.040 --> 0:13:34.000 materials that you know what I need the switch gear, 0:13:34.559 --> 0:13:36.800 and I've been off phoe with them, and a lot 0:13:36.880 --> 0:13:40.000 of those folks were the regional supply house contacts. And 0:13:40.360 --> 0:13:42.480 here I had to try to not lose my cool 0:13:42.600 --> 0:13:45.160 because multiple times I was talking to somebody the regional 0:13:45.160 --> 0:13:49.840 supply house and my particular order is for Siemens switch gearboard, 0:13:50.640 --> 0:13:52.880 and so the regional supply house person would talk to 0:13:52.960 --> 0:13:55.160 me and say, well, give me your you know, give 0:13:55.160 --> 0:13:57.400 me your spec send them all over to me. I'll 0:13:57.400 --> 0:14:00.320 call the manufacturer, I'll find out where you are in 0:14:00.360 --> 0:14:02.880 the order process, and then I'll call you back and 0:14:02.880 --> 0:14:04.640 tell you if I can move you up, and then 0:14:04.679 --> 0:14:07.160 what it will cost us for, you know, for the 0:14:07.200 --> 0:14:10.839 fee to move you up. And you have to kind 0:14:10.840 --> 0:14:13.120 of not lose your mind right there, because you're looking 0:14:13.120 --> 0:14:16.240 at your supply house saying, why couldn't you move me up? 0:14:17.200 --> 0:14:19.480 Are you not? You don't have the capabilities, you don't 0:14:19.480 --> 0:14:22.200 have the buying power. For what reason can you not 0:14:22.320 --> 0:14:24.360 get this faster? Why do I have to go through 0:14:24.360 --> 0:14:27.840 this alternate path to go somewhere else? And you know, 0:14:27.880 --> 0:14:30.600 it's really just a buying power thing, you know. And 0:14:30.680 --> 0:14:33.320 so this is kind of assessing the problem. So I've 0:14:33.320 --> 0:14:36.520 spent thirty days figuring out what the problem was. I 0:14:36.520 --> 0:14:38.880 feel like I've at least come to some version of 0:14:38.880 --> 0:14:41.080 a conclusion of what this is. And I don't. Look, 0:14:41.120 --> 0:14:43.520 I'm not some end all expert. I have no idea. 0:14:43.960 --> 0:14:46.840 I went to you know, college, and I studied finance. 0:14:47.000 --> 0:14:51.240 I didn't studied electrical supply chains. So nor do I 0:14:51.320 --> 0:14:54.360 totally understand how electrical systems work. I just know that 0:14:54.360 --> 0:14:56.160 I have a building, you know, that's burning, and I've 0:14:56.200 --> 0:14:58.600 got a lot of interest carry every month, and so 0:14:58.720 --> 0:15:00.720 now I'm trying to come up with all t solutions 0:15:00.720 --> 0:15:02.440 for how to get my electrical insight. 0:15:03.520 --> 0:15:06.640 Part of me is amazed that it's now twenty twenty 0:15:06.640 --> 0:15:10.040 four and we are still talking about shortages that are 0:15:10.120 --> 0:15:14.560 this impactful. So, Joe, I remember when we spoke about, 0:15:14.560 --> 0:15:16.800 you know, residential real estate. We would talk about the 0:15:16.840 --> 0:15:20.720 idea that maybe there's like a sink missing or something 0:15:20.840 --> 0:15:24.440 in twenty twenty one or even early twenty twenty two. 0:15:24.800 --> 0:15:28.800 But it is the persistence of this particular shortage is 0:15:29.000 --> 0:15:29.920 kind of mind blowing. 0:15:30.080 --> 0:15:30.280 Yeah. 0:15:30.320 --> 0:15:33.200 I mean, I imagine when you were building buildings like 0:15:33.240 --> 0:15:35.960 in twenty twenty one, I assume, like many others, you 0:15:36.040 --> 0:15:40.680 had multiple shortages of things like is that the case? 0:15:40.720 --> 0:15:42.560 Like was there a time when, like, you know, like 0:15:42.640 --> 0:15:47.400 everything was in scarcity for you. Yeah, and then what 0:15:47.840 --> 0:15:49.880 like so do any of these people that you get 0:15:49.920 --> 0:15:52.360 on the calls like have an exploration for why this 0:15:52.440 --> 0:15:54.280 particular supply chain hasn't caught up? 0:15:55.600 --> 0:15:59.000 Not not really great And so that's had to I 0:15:59.000 --> 0:16:01.760 think I've had to really do a lot of homework 0:16:01.840 --> 0:16:04.360 in other areas to figure out what the problem is. 0:16:04.840 --> 0:16:07.720 But when you start to think through it logically, it 0:16:07.760 --> 0:16:09.920 does start to make sense. I mean, think about the 0:16:10.000 --> 0:16:13.520 amount of electrical vehicle charging stations that have come into 0:16:13.520 --> 0:16:16.520 the country just over the last couple of years here, 0:16:17.160 --> 0:16:20.360 think about the amount of data centers that are going in. 0:16:20.760 --> 0:16:24.520 Think about what the amount of energy requirement has increased 0:16:24.920 --> 0:16:27.920 just with the invention of you know, like chat, GPT 0:16:28.160 --> 0:16:31.960 for example, right and AI, And think about all of 0:16:32.000 --> 0:16:36.120 that is requiring power. You have solar farms going in 0:16:36.200 --> 0:16:38.720 left and right. I mean, all of this stuff ultimately 0:16:38.920 --> 0:16:43.080 all has electrical components, and there are five major manufacturers 0:16:43.200 --> 0:16:46.440 that produce all the electrical components. And so I think 0:16:46.480 --> 0:16:50.320 it literally is just a product through the system problem. 0:16:50.720 --> 0:16:53.160 And I think to totally understand that, you would probably 0:16:53.200 --> 0:16:55.680 need to get somebody you know on the pod here 0:16:55.800 --> 0:16:57.880 from one of those manufacturers by the. 0:16:57.800 --> 0:16:59.920 Way, Tracy, you know obviously we touched on some of 0:16:59.960 --> 0:17:02.560 the stuff recently with our episode with Steve Eisman, like 0:17:02.640 --> 0:17:05.639 some of these like old school industrial players that have 0:17:05.840 --> 0:17:08.280 went to the moon. I just looked up Eaton, which 0:17:08.320 --> 0:17:10.359 I don't think had come up on a previous episode 0:17:10.440 --> 0:17:12.240 is one of the names we talked about. That is 0:17:12.280 --> 0:17:14.879 another stock that basically. 0:17:14.440 --> 0:17:17.199 Looks like in Vidia right now when you look at it. 0:17:17.240 --> 0:17:19.320 Here is this like sleepy stock from a few years 0:17:19.320 --> 0:17:22.320 ago and then now in this great electric era of 0:17:22.359 --> 0:17:25.440 electrification that is like another stock disc gone absolutely to 0:17:25.520 --> 0:17:25.840 the moon. 0:17:26.320 --> 0:17:28.840 It is truly remarkable that there are those sort of 0:17:28.880 --> 0:17:31.840 old school companies out there. I mean, Tractor Supply is 0:17:31.880 --> 0:17:36.399 another one. But these businesses in the business of doing 0:17:36.440 --> 0:17:40.359 these old fashioned things that look like semiconductor stock charts. 0:17:40.640 --> 0:17:44.080 Yeah, it's it's really remarkable. So Chris, you posted on Twitter, 0:17:44.119 --> 0:17:47.840 You're like, someone just goes start a electrical components factory 0:17:47.920 --> 0:17:48.560 in Mexico. 0:17:48.840 --> 0:17:49.600 You get upset up? 0:17:49.600 --> 0:17:52.080 Did anyone take you up on that offer? Is something 0:17:52.080 --> 0:17:54.159 going to get built to expand this capacity that you 0:17:54.200 --> 0:17:54.399 know of? 0:17:55.280 --> 0:17:57.760 There are a number of people that are trying to 0:17:57.840 --> 0:18:01.080 figure it out, I would you know, the obvious statement 0:18:01.119 --> 0:18:03.680 here is that when Siemens is one of the companies 0:18:03.720 --> 0:18:06.399 that you're competing against or I mean, I don't know, 0:18:06.400 --> 0:18:07.960 you've got the stocks in there. I'm not sure what 0:18:07.960 --> 0:18:10.639 the market cap is on Eaton. None of these are 0:18:10.680 --> 0:18:14.879 small companies, right, so I think there's pretty good fear 0:18:14.960 --> 0:18:17.720 from those that are in the manufacturing space that they're. 0:18:17.600 --> 0:18:18.920 That's what Eaton is asked about. 0:18:18.960 --> 0:18:20.480 How do we actually Eaton. 0:18:20.320 --> 0:18:22.520 Is one hundred and thirty nine billion dollar company? Now, 0:18:22.520 --> 0:18:24.760 oh no, no, sorry, Siemens is one hundred and thirty nine 0:18:24.800 --> 0:18:27.600 billion dollar company. Eton is just a oh yeah, it's 0:18:27.600 --> 0:18:29.159 one hundred and twenty five billion dollar Yeah. So these 0:18:29.200 --> 0:18:32.159 are massive company as we're talking about, right. 0:18:32.040 --> 0:18:34.399 So the concept that you're just going to walk out, 0:18:34.480 --> 0:18:37.159 you know, and grab a pe firm that's worth you know, 0:18:37.200 --> 0:18:39.680 twenty thirty billion dollars ago just compete head to head 0:18:39.680 --> 0:18:42.240 against these companies is a little bit intimidating. I'm sure. 0:18:43.359 --> 0:18:47.119 What is interesting is the reason I reference Mexico is 0:18:47.160 --> 0:18:50.760 because one of the possible solutions that's come forward here 0:18:50.800 --> 0:18:53.639 on our building and one of the paths I'm actually 0:18:53.680 --> 0:18:57.080 going down is we have a friend that runs some 0:18:57.160 --> 0:19:00.720 factories and wars and I got on the phone with 0:19:00.800 --> 0:19:03.399 his engineer that runs his five factories. They have like 0:19:03.480 --> 0:19:05.560 six or seven thousand employees, whole bunch of people that 0:19:05.600 --> 0:19:08.600 work for him there, and so these are very large facilities. 0:19:08.640 --> 0:19:10.640 I got on with his engineer, and his engineer reached 0:19:10.640 --> 0:19:13.520 out to his electrician and we have actually sourced the 0:19:13.600 --> 0:19:18.399 exact same semen spect item that's going to come from 0:19:18.440 --> 0:19:20.919 a Mexican supply house that is supposed to deliver in 0:19:20.960 --> 0:19:21.879 eight weeks from today. 0:19:22.359 --> 0:19:24.359